On what basis should a venture firm hold its investment partners accountable?

Mike Lazerow · Aug 2, 2021

What matters in investing is the deals you do, not the deals you miss or how other funds perform

The deals you do drive how you spend your day and ultimately the size of your returns; another fund's results are irrelevant to your own

42:25 20VC: Mike Lazerow on Why How You Operate As a VC Is More Important Than Who You Are and What You Have Done, Why Boards Are More Important for the Entrepreneur than Investor & How The Best Entrepreneurs Prep Their Boards & Extract Value From Them

Nabeel Hyatt · Apr 4, 2025 · hedged

Investors should study their successes rather than dissect their losses

Venture is the business of things that work, so the valuable learning is in how you found the founder, what signals were present, which founder types you connect with, and the market and product dynamics at that time; losses are only worth revisiting if you made the decision from a bad place or for the wrong reason

Scope: exception: worth examining a loss if you were in a bad place or decided for the wrong reason

56:41 20VC: Why To Win in AI, Investors Need to Change Their Approach | Why VC is Run by Principals and Associates and is a Broken System | The Bull Case for Anthropic & Whether Deepseek Changes Their Strategy with Nabeel Hyatt @ Spark Capital

Taavet Hinrikus · Apr 28, 2025 · hedged

Measuring the share of IC'd deals that get done is not worth tracking and could set the wrong incentives

Deals are also time-dependent — a partner may decline now and come back six months later when the company has changed

Scope: directionally it's roughly 70% done / 30% not

28:44 20VC: VCs are Spreadsheet Monkeys and are Commoditised | Why Fees and Carry Misalign GPs and LPs | Why Founders Will Realise Multi-Stage Funds Damage Seed Rounds | Why We Need European Sovereignty More Than Ever with Taavet Hinrikus

Gili Raanan · Mar 28, 2026

Trying to win every important deal is a losing strategy; investors should focus their energy on the teams they already partnered with

You cannot cover or win everything — anyone who insists on being in every important AI or cybersecurity company predictably will not be

40:52 20VC: The Venture Model is Broken | You Need to be Greedy and Selfish to Win Early Stage Investing | Why Margins Do Not Matter for Early-Stage Startups | The Growth Rate that is Required in a World of AI with Gili Raanan, Founder @ Cyberstarts

Gili Raanan · Mar 28, 2026

Losing one or two deals does not matter if the investments you do make are excellent — a firm is only as good as its next investment

Which deals you lost is irrelevant to outcomes, so the productive focus is your own portfolio and continuous improvement

42:42 20VC: The Venture Model is Broken | You Need to be Greedy and Selfish to Win Early Stage Investing | Why Margins Do Not Matter for Early-Stage Startups | The Growth Rate that is Required in a World of AI with Gili Raanan, Founder @ Cyberstarts

Miles Clements · Mar 9, 2026

Systematically auditing misses — scoring how many of the 50 best private companies you are the investor of record in — is the single most important conversation a venture partnership can have

If the firm is not measurably getting better at winning the next cohort of top companies, nobody should beat them up harder than themselves

27:48 20VC: Inside Accel's $4BN Growth Investing Machine | Cursor is Dead is Total BS: Here is Why | What Missing Rippling and ElevenLabs Taught Us | Are $2BN-$10BN IPOs Dead | Why Now is a Great Time to be Thoma Bravo with Miles Clements

Harry Stebbings · Mar 28, 2026

Every public company that does not have Sequoia as an investor should be counted as a miss

Market share of great companies is a core driver of returns for firms like Sequoia and Andreessen

41:51 20VC: The Venture Model is Broken | You Need to be Greedy and Selfish to Win Early Stage Investing | Why Margins Do Not Matter for Early-Stage Startups | The Growth Rate that is Required in a World of AI with Gili Raanan, Founder @ Cyberstarts

Hemant Taneja · Sep 22, 2025

If you're not losing deals you're not competing in the right fights; a win rate above roughly 30% means you're in the right pond, and losing more is a sign of health

The very best founders meet five to seven great firms and pick one, so a low win rate is structural; a perfect record means you're competing in the wrong pond

77:05 20VC: General Catalyst CEO Hemant Taneja on The Future of Venture Capital: Chanel vs Walmart | Lessons Scaling GC to $40BN in AUM | Investing $5BN+ Into Stripe Over 14 Rounds | Investing Hundreds of Millions into Anthropic at $60BN Valuation

Miles Clements · Mar 9, 2026

No firm achieves both 100% coverage and 100% win rate; a healthy win rate is around 80% and claims of 100% are not credible

If you never lose, you are not putting yourself into competitive enough situations

Scope: 100% coverage and win rate remains the aspiration

28:43 20VC: Inside Accel's $4BN Growth Investing Machine | Cursor is Dead is Total BS: Here is Why | What Missing Rippling and ElevenLabs Taught Us | Are $2BN-$10BN IPOs Dead | Why Now is a Great Time to be Thoma Bravo with Miles Clements

Woody Marshall · Oct 11, 2023

Firms should not punish partners for individual investment mistakes

Venture is a risk business; smacking people's hands produces a risk-averse investor base and guarantees your next fund returns something like 1.6x

35:29 20VC Roundtable: Are IPOs Back? Is Growth Dead? What Does it Take to Raise a Growth Round Today? How Do VCs Solve The Liquidity Challenge? Will We See a Massive Resetting of Valuations? AI Hype Growth Rounds?

Pat Grady · Jul 8, 2024

Individual investment outcomes should not be grounds for punishment or praise — nobody at Sequoia is reprimanded for a failed investment or lauded for a single great one.

Venture is a risk-taking business and one data point doesn't make a trend; a string of bad or good investments indicates something wrong or right in the process, but a single outcome doesn't.

Scope: applies to single outcomes, not to a sustained string of results

11:57 20VC: The Sequoia Investment Process | Investing Lessons from Doug Leone, Roelof Botha & Alfred Lin | Sequoia's Framework for Analysing Founders | The True Benefit of Having Sequoia on a Cap Table & Sequoia's Biggest Threat with Pat Grady

Jason Lemkin · Jan 4, 2024

The deals you see and lose are generally better than the deals you do, whereas deals you never saw shouldn't bother you

58:56 Deals seen and lost are typically better than deals done while deals never seen dont matter

Jason Lemkin · Jan 4, 2024

It would be healthy for venture if half of non-GP investors and a quarter of GPs lost their jobs for failing to put up numbers

Venture is a numbers business, not a charity or a best-efforts job — LPs flip straight to the returns page of a 100-page deck, and every GP, partner and associate is just a number

63:34 Healthy industry correction requires removing investors who dont produce returns

Anish Acharya · Feb 9, 2026

a16z's practice of evaluating GPs on founder 360s every two years rather than near-term returns structures incentives correctly and makes it a company rather than a typical VC firm

Being judged on whether founders say you told the truth, showed up and were responsive, regardless of company performance, prevents the disengaged and high-anxiety investor behavior he had experienced as a founder

72:38 Founder 360 feedback over near term returns

Anish Acharya · Feb 9, 2026

At a16z it is not acceptable to have missed a deal in your domain; the expectation is to see 100% of deals in your sector and win 100% of those you go after, though being wrong on a decision made with the information you had is acceptable

They aren't allowed to believe in luck; making a wrong call is the business, but not seeing a company is a coverage failure

74:28 Full sector coverage mandatory wrong calls forgiven

Mike Maples · Jan 6, 2025

Even though outcome sizes are unknowable, a fund can hold partners objectively accountable by measuring investors on 'picking skill' (fraction of first checks that become 20x or 100x) and the reserves partner on what fraction of follow-on dollars land in the top-ranked companies

The follow-on metric is completely objective — you can stack rank companies by current value and see what percentage of dollars are in the top ones — and adopting these measures materially improved Floodgate's returns

13:50 Measure investors by picking skill and reserves partner by dollars in top companies

Harry Stebbings · May 13, 2024 · hedged

You could get useful signals on individual partner performance from fundraising outcomes — who raised the most, from the best investors, and conversion rates

True evaluation needs a long time period, but fundraising data offers interim signal

37:53 Fundraising outcome data provides interim signal on partner performance

Tom Blomfield · May 13, 2024

YC deliberately ignores its own fundraising data when judging partners, because it's easy to gamify and would incentivise the wrong behaviour

Who cares that a company raised $10m from a given investor — YC doesn't want to incentivise raising more

38:03 Fundraising outcome data should be ignored since its gamifiable and wrong incentive